just thinking about the 3$bn

The $3b NNPC loan demonstrates that the driving variables of local PMS pricing is the USD exchange rate.

The question is this, if you have local refinaries operational and allocate crude oil to those refinaries, will prices of local PMS fall? The answer is no.

Why? Because crude is priced in $ thus the cost of the "local" crude will also go up if Naira falls as $ rises.

The ONLY way the cost of that local PMS will fall is if you SUBSIDIZE the cost of crude oil.

You can argue that local crude can be priced in Naira, but that's still a subsidy, the crude can be sold in $, you are selling in Naira, thus SUBSIDY

The way to look at this is to agree that a local subsidy is NOT bad if it's subsidizing local production and consumption to grow the economy.

In summary as long as the naira is weak, the "expensive" $ priced crude will be subsidized.

OPEC quota or not.

So real questions is how to afford this local subsidy.

That's a topic for another day

this is the break down

The Central Bank of Nigeria is set to launch its Price Verification Portal on August 31 2023.

Please read this explainer written in 2021, some elements may have been changed or updated, but the broad idea remains.

Understanding CBN’s new guidelines on import and export financing

The Central Bank of Nigeria's (CBN) new import and export financing guidelines via an eValuator system are set to effect on February 1, 2022. So, let's talk about it.

Introduction of the Policy

The Central Bank of Nigeria's new guideline on imports is based on the electronic submission of invoices called e-vouchers. This new guideline is mandatory for all imports above $10,000. These new e-Vouchers will be issued and authenticated by Authorized Dealer Banks (ADBs).

Importers of any good or service into Nigeria must register that good or service supplier into an electronic database. This database is updated annually. The importer of any good or service will then submit import papers to complete a Form M. Still electronically, the price the importer will quote will be based on a "Global Price Verification Mechanism (GPM) guided by a benchmark price. The GPM will advise a benchmark price for all goods and services, which is the actual spot price advised to the importer by the supplier.

The Benchmark Price

The new guideline revolves around this benchmark price. If the supplier wishes to import, his quoted price on the invoice presented to his bank (ADB) should be at most 2.5% of the verified global benchmark price. If the quoted price exceeds 2.5%, Form M will be queried and not processed in Form M or NXP. It is the responsibility of the importer to ensure that their supplier complies.

Let me summarize this way. If you intend to import a BMW 5 Series car from BMW of Atlanta, these are the steps under the guideline.

1. Go to BMW of Atlanta, and obtain an Invoice.
2. BMW of Atlanta will register on a dedicated electronic portal provided by CBN but operated by the CBN agent service provider. This registration will cost $350 and be valid for 12 months.
3. The CBN's service provider will issue BMW of Atlanta a digital certificate. BMW of Atlanta will sign your eInvoice with this digital certificate.
4. BMW of Atlanta will provide the authenticated eInvoice to you
5. The CBN's service provider will transmit the BMW eInvoice to CBN, specifically the Nigeria Single Window Portal Trade Monitoring System (TRMS)

If the BMW of Atlanta quoted price for your BMW 5 series is more than 2.5% of the benchmark price, then your Form M will not be processed.

This guideline also applies to exports; the critical difference for exporters is that the exporters from Nigeria are quoting a price as the supplier. They must quote within a 2.5% band as well.

Thus, if I am a Cassava chip exporter and get an order from China, I cannot quote a selling price below 2.5% of the benchmark cassava chip price as CBN advised. This is an important distinction. Now, let us talk about the exchange rate mechanism in Nigeria.

Why is Exchange Rate Important?

When you import, you are buying Forex; in effect, you are taking Forex away from Nigeria; you "weaken" the Naira. When you export, you bring Forex into Nigeria and "strengthen" the Naira.

The CBN and all Central banks always promote exports; however, not all Central Banks want a strong currency. Strong export economies such as China, Germany, Switzerland, and Japan prefer a weaker currency to ensure their exports are competitive. The CBN's goal is to have a "strong" Naira to the US Dollar by words and deeds. The CBN has defended the Naira exchange value in relation to the US Dollar to ensure it does not weaken further. The CBN is rightly wary of imported inflation.

Nigeria, however, is also an exporting nation, she exports Crude oil, Cocoa, Cashews, and many other commodities, but Nigeria's CBN also has a Capital Control policy. This means the inflow and outflow of foreign capital in and out of Nigeria is controlled and regulated. The CBN sets the Exchange rate of the Naira to the dollar, not the interplay of Demand and Supply. Thus, Nigeria has two rates, the official NAFEX rate, which exchanges $1 to about N414 and the unofficial rate at about $1/550.

The Export v Import Gambit

Many exporters from Nigeria are willing to sell their local commodities at a discount to the international commodities market because this attracts international buyers. They, however, do not remit their Forex to the official channels but rather to the unofficial market to take advantage of the higher exchange rate. So, exporters can earn more from the arbitrage in selling USD to the unofficial market.

The CBN has a standing policy that exporters must repatriate all exports within 90 days for oil and gas transactions and 180 days for non-oil exports. The CBN had in January 2021 instructed banks to prohibit Nigerian exporters that fail to repatriate Forex earnings from banking services with effect from January 31, 2021.

CBN has tried sticks of sanctions and carrots of paying N5 per deposit to encourage the repatriation of proceeds back to Nigeria, but this has not succeeded. This policy is an export-import gambit. The exporter will have to invoice at the benchmark prices, enabling them to earn more from the export side by selling at higher prices. Still, they will then remit Forex at the lower exchange rate.

The CBN objective of a "strong" Naira is thus affected by the low foreign reserves it must defend the Naira. The low reserves are a function of the non-remittance of export proceeds promptly as well as a fall in remittances generally.

Exports win, Imports lose?

This new e-Voucher guideline raises commodity prices in Nigeria. It removes the advantage of lower prices from Nigerian exports, but more remittances should flow to the CBN. Importers have a more challenging time.

However, is the 2.5% not too narrow a band? When you buy a BMW in Atlanta, three main factors drive your selling price.

1, Cost price, how much is the car worth?
2. Your profit margin, how much do you want to make?
3. Inflation expectation, what will it cost you to replace your stock?

The BMW from Atlanta is sold in United States Dollars; however, you are importing to sell in Nigeria for Naira. According to the CBN, the OTC FX Future dollar rates to Naira for delivery in May 2022 show a further weakening of the Naira to N432.32. The futures price is thus my replacement cost in 5 months. Therefore, all traders add a margin that captures this inflation expectation. The language in the CBN circular explicitly suggests that the margin is a firm 2.5%; it implies ignoring the inflation reality. Many importers will no longer open Form M, finance their imports, or change destination ports.

However, this policy has some good points; it allows the CBN to have a database of importers and import requests. Every time a new supplier registers, it's a trade forecast for the CBN. It is an early notice to the Central Bank of Nigeria that it must have forex reserves to meet that Forex demand. This will allow more long-term planning and management of the reserve position. It will also remove the fraudulent request for FOREX on non-existent trades and overall reduce slippage.

We shall revisit this policy.

🇳🇬According to the Nigerian Senate, there are 62 revenue generating agencies of the Federal Govt

Some....
FAAN
NPA
FIRS
NDIC
NMA
NAFDAC
NCS
SON
NAMA
BOA
NBET
TETFUND
FRCN
NRC
NIMASA
CAC
NCAA
NBC
JAMB
NCC
NNPC
NIS
NLRC
NIPC
NTA
NEPC
SEC
.....

Source @StatiSense

this image says it all

The Nigerian billionaires and Tinubu's Tax Reform

It has been a refreshing experience, in the last one week, to read very strong endorsements of President Tinubu's tax reform by at least five major national newspapers via their editorials.

I align with the view of Professor Niyi Akinnaso who wrote, yesterday, in his Nation Newspaper column, that the media should assist the government in achieving its development goals in the overall interest of the people instead of unrelenting negative reporting.

Our country has a chronic revenue problem which left previous governments no option than to borrow. Available records show that we have over N75 trillion in foreign and local debts.

We have an economy that is reported to be the largest in Africa at almost $500 billion in GDP size, with an estimated 200 million plus population. In comparison with South Africa, with about 50 million population and second largest economy in Africa, we are nowhere near in terms of tax revenue. While South Africa has tax to GDP ratio of 27.3%, our country is crawling at 10.86%!

For proper context, the richest man in Africa is a Nigerian and the second richest man is a South African, Johann Rupert. The Personal Income Tax Rupert paid, as individual, to the South African government in 2022 was more than the entire tax collected by the 36 states of Nigeria in 2021.

There are three Nigerians among the 15 richest Africans whose business interests cut across various sectors - from retail to banking, oil & gas, mining, telecoms, real estate, manufacturing, food and beverage e.t.c. The combined wealth of the three Nigerians on the Africa's rich list is put at $27.4billion whereas Rupert's wealth is put at $10.7billion.

Here is the interesting twist: The rich and wealthy Nigerians live in states within Nigeria and do most of their businesses in Nigeria, yet, what one wealthy South African paid as his Personal Income Tax in one year was more than the entire revenues of 36 states in Nigeria.

In Naira terms, South Africa collected N27.76 trillion in Personal Income Tax in 2022, while Nigeria with population 4 times bigger than South Africa collected N1.6trillion in total IGR of states.

Our tax system is dysfunctional especially at the state level. This is why our states and Federal Government can not fund big infrastructural projects and social services. It is the reason the Taiwo Oyedele led Tax and Fiscal Reform Committee put together by President Tinubu has come at the right time.

The committee aims to close annual N20 trillion tax gap Nigeria is denied within the next few years, by bringing more eligible taxpaying Nigerians into the tax bracket. This does not mean that the Federal Government is planning on raising taxes. Far from it! It only means time has caught up with wealthy Nigerians would have hitherto evade paying their taxes.

The committee already has its job cut out for it. President is determined to reset the finances of the country to generate the required money to fund real development and improve the quality of life of Nigerians.

Maryam1234:


Are you sure you're not the one catching it, where Goethe your swimming skills

my one and only omaye

soccerlite:

Cos it's hand press doesn't make more healthy for consumption

The saturated fat isn't reduced


Factory produces oil are neatly produced, hygienically produced, impurities removed scientifically tested and gotten in large quantity

am just advertising my product, all the factory stuff na packaging .

nation wide delivery for your healthy original

hand pressed groundnut oil .

have also seen a family were 4 of them are working with NDLEA . and their last born who is a strong weed smoker just saw his name in the recent recruitment shortlist and has gone to camp for training .


something's I see all these Government agencies like family business and who known who .

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The oil is 100% pure groundnut oil, which is good for your health not like all this chemicals diluted sunflower oil which are very dangerous to your heart and your whole health system.

Danmaiduguri:


Lies

fool ...... 9ja has not happen to you that's why

press9jatv:
No be 9ja you dey niiii. No hope in sight joor

very painful

ComrdDRS1:
Yeah I mean business business......

You can supply to me I sell and send you your money...
I am ready to work with you

it's doesn't work like that . we also buying from the dealers ... we not the ones catching it from the river.

wahala

I dedicate “Rich Spirit” by Kendrick Lamar to Aşiwaju Bola Ahmed Tinubu.
Great jam!

Congrats sir
I dedicate “Rich Spirit” by Kendrick Lamar to Aşiwaju Bola Ahmed Tinubu.
Great jam!

ComrdDRS1:
Okay..
How I be a dealer or supplier.
I mean business

hmmmm

Okk... Chat me up on WhatsApp... Let conclude

Okk... Chat me up on WhatsApp... Let conclude


08069929209

ComrdDRS1:
Good day are you still in the business

yess .....we always On business

ohams1985:
Do u waybil to Bayelsa?

yess boss ...we waybill nation wide